Financial regulators on both sides of the Atlantic imposed multibillion-dollar fines on five global banks Wednesday as part of investigations into rigging of key foreign exchange markets.

The U.K.'s Financial Conduct Authority (FCA) has imposed fines totaling more than £1.1 billion ($1.7 billion) on Citibank, HSBC, JPMorgan Chase Bank, The Royal Bank of Scotland and Switzerland's UBS, it announced. It added that the fines were the largest ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA).

Meanwhile in the U.S., the Commodity Futures Trading Commission (CFTC) ordered the same banks to pay over $1.4 billion in penalties. The formal settlement is for the "attempted manipulation of, and for aiding and abetting other banks' attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders," it said. It added that the time of the improper conduct varied across the banks, commencing in 2009 for certain banks and continuing into 2012 for each bank.

"The setting of a benchmark rate is not simply another opportunity for banks to earn a profit. Countless individuals and companies around the world rely on these rates to settle financial contracts, and this reliance is premised on faith in the fundamental integrity of these benchmarks," Aitan Goelman, the CFTC's Director of Enforcement, said in a press release on Wednesday morning.

"The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world."

BoE dismissal

The more detailed breakdown shows that the FCA is fining Citibank $358 million, HSBC $343 million, JPMorgan Chase $352 million, RBS $344 million and UBS $371 million. The CFTC is imposing fines of $310 million each for Citibank and JPMorgan, $290 million each for RBS and UBS, and $275 million for HSBC.

U.K. lender Barclays is also part of the investigation but did not settle. The FCA stated it would continue to progress the investigations which will also cover wider forex business areas. In a press conference on Wednesday morning, a representative from the FCA said that Barclays was the only remaining bank under investigation by the regulator.

Also in the U.K., the Bank of England (BoE) announced Wednesday that Martin Mallett, its chief forex dealer, was dismissed on Tuesday for "serious misconduct" relating to its internal policies. It stated that Mallett was aware that bank traders were sharing information about client orders. This is not necessarily improper, the BoE stated, but increased the potential for manipulation.

Mallett did not not escalate the matter despite being uncomfortable with the behavior, it added, but was "not at all" related to the BoE's own investigations which found no evidence that any central bank official was involved in any unlawful or improper behavior in the forex market.

Later on Wednesday, BoE Governor Mark Carney said that he accepted the criticism issued in the independent investigation. He again highlighted that Mallett's dismissal was for unrelated reasons but conceded that his conduct might not have been discovered without the review. He added that he was disappointed with the behavior but said that the department he worked in was "outstanding."

Every day, $5.3 trillion is traded in the world's foreign exchange markets, according to the Bank of International Settlements' latest figures, with around 41 percent of trades being processed through sales desks in the United Kingdom and 18 percent in the U.S.

Already hammered by their role in the 2008 financial crisis and the rigging of the key bank rate LIBOR, the global banking sector took another battering to its reputation in October last year as investigations started into the fixing of the foreign exchange markets.

This followed media reports back in June 2013 which highlighted the alleged wrongdoing in foreign exchange trading. Regulators launched a formal investigation and several banks announced that they were in the early stages of reviewing their trading practices after being contacted by regulators.

Certain forex traders at the banks coordinated their dealings with traders at other banks in their attempts to manipulate the forex benchmark rates, the CFTC said on Wednesday. This included the "4 p.m. London fix" - a daily snapshot of exchange rates that is used as a benchmark for a much larger set of currency deals as well as the foreign holdings of mutual funds.

Traders at these banks used private chat rooms to communicate and plan their attempts to manipulate the FX benchmark rates, according to the CFTC, and disclosed confidential customer order information and trading positions while altering trading positions to accommodate the interests of the collective group.

Precious metals rigging

The CFTC also said that banks would need to to cease and desist from further violations, and take specified steps to implement and strengthen their internal controls and procedures. The FCA added that it was launching an industry-wide "remediation program" to ensure firms address the root causes of these failings.

Other global regulators are expected to announce the results of their own investigations with RBS, which said Wednesday that it remained in discussions with other governmental and regulatory authorities on these issues.

UBS said that it had been asked to pay 134 million Swiss francs ($139 million) by the Swiss Financial Market Supervisory Authority (FINMA). The bank has severely violated the requirements for proper business conduct, the Swiss regulator said, and also stipulated it had found serious misconduct of employees in precious metals trading as well as the foreign exchange markets.

'Unacceptable' conduct

Meanwhile, JPMorgan called the trader conduct "unacceptable" and stated that it is making significant improvements to its systems and controls to prevent it happening again. HSBC said that it did not tolerate improper conduct and would take whatever action was appropriate.

RBS Chairman Philip Hampton condemned the actions of the employees responsible for this misconduct and fully accepted the criticism from the regulatory announcements.

"Today is a stark reminder of the importance of culture and integrity in banking and we will rightly be judged on the strength of our response," he said in a press release.

Clarification: This headline figure for the total amount of the fines has been updated following further details on the individual fines for each of the banks, and the fine imposed by Swiss regulators.